FedEX Redesigns Call Centers To Make One From Many

Prompted by alarming results of a routine internal survey that revealed declines in its customer service standards, Federal Express overhauled systems and training throughout its 16 call centers nationwide to increase service times and reduce costs.

In what it considers a "virtual consolidation" Federal Express shifted call center operations from individual units to a network operation deploying call routing, labor scheduling and customer profiles and identification. The changes enabled FedEx to achieve customer satisfaction levels of between 96 percent and 98 percent on its 300,000 daily calls nationwide. The company's service representatives handle another 300,000 calls worldwide, while a voice response unit helps handle about 175,000 calls.

"We launched into the details of our analysis as our first stage of our customer survey and recognized that gaps existed between customer needs and what we were providing," said Cyndi Henson, vice president, customer service.

Even with an 88 percent to 92 percent satisfaction level and a 20-second pick-up time, customer service ratings had been declining and hovered at 90 percent, according to the survey. Today, representatives are responding to calls within five to eight seconds and generating customer satisfaction levels above 92 percent.

"Our goal is to have 87 to 92 percent of all calls answered within 20 seconds, Henson said. "Most days we are finding we can do that with 96 to 98 percent of our calls."

FedEx also has reduced employee turnover, streamlined call flow by identifying types of calls, and reduced the time required to resolve customer inquiries by rephrasing questions.

The overnight delivery service had identified the drops in customer satisfaction levels in May and implemented the redesign by October of the same year.

"It was critical for us to have the program completed by October so we would have the opportunity to make any corrections by the December peak," Henson said. The program appears to be working. This past holiday season FedEx made company history by allowing workers to take floating days off during what is considered to be the busiest season in the delivery industry.

"Previously every call center operated as a single unit," Henson said. "Now we have an intelligent call processing system that enables us to get a call routed to the center that has the greatest probability of answering the call in the least amount of time."

The company upgraded its voice response unit to streamline types of calls and expanded caller identification to workstations across the network. Profiles of FedEx customers appear on a service agent's computer screen with each in-bound call.

"Before, each call center had its own group of customers, but once we went to network processing we had to load the profiles onto the network format," Henson said. The in-bound feature enables an agent in California to access information about a customer calling from Boston.

Additionally, Henson said employee schedules had been based on call volumes to the individual centers. "Now we can establish shifts based on the network needs rather than call centers trying to staff their own. All centers have peaks and valleys and now we are able to take all the peaks and valleys as a network."

Although FedEx adhered to its "no layoff" policy in the redesign, Henson said the company did have to reduce hours for some of its 3,000 customer service representatives, of which 75 percent to 78 percent work full-time.

"Throughout the whole process, that was the biggest employee relations issue we had to go through," Henson said. "Before, each center scheduled its own employees, which meant there were 200 to 250 people in at 7 a.m. Based on the network scheduling, we saw that the centers needed only 50 people in the morning, and we needed to shift hours to later in the day."

FedEx also shortened the amount of time in which service representatives resolve inquiries.

"We streamlined calls and commonized the call flow," Henson said. "In our analysis we recognized huge variations in call times for calls of the same nature." Variations ranged between 140 to 190 seconds for calls of the same nature, she said.

"One second in handling translates to a half-million in calling costs for a year. We did a lot of monitoring and focus sessions with representatives to understand a better way to ask the same question."

Although Henson would not say how much costs per call were reduced by, she noted they currently run between 25 cent to 30 cents per call, and overall profitability of the call centers is up.

FedEx also refined training programs and standard operating procedures. Henson explained that rephrasing a standard question such as "How much does it weigh?" to "Is it a heavy package, does it weigh more than five pounds?" enabled representatives to "speed through the call faster."

The company currently is monitoring service levels through an out-bound survey that polls 8,000 customers monthly and an on-site program that evaluates service representatives' performances. The survey profiles overall satisfaction based on nine different skill dimensions, and the scores are forwarded to call center managers monthly.

"Based on all indicators that we measure, we have shown improvements," Henson said.

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